Friday, June 3, 2011

AA very Spain-centric blog this week and at that one that will only be of any interest to people who are Spanish tax resident, declare their taxes and have not already done so. A few reminders:

Everyone who lived in Spain for 183 or more days in 2010 should be submitting a tax return. There are exceptions and if your income is below certain levels then you don't have to declare (but see below). To see these levels visit Spanish income tax rates 2011

If your income is too low to declare it may still be wise or even obligatory to do so: wise because you may have a tax rebate due; obligatory in your first year of residence regardless of income levels. If you never declare La Renta you will never be considered tax resident which can put you at a disadvantage when it comes to paying other taxes like capital gains and inheritance.

The deadline for submitting your Spanish tax declaration "La Renta" is the end of June but to submit allowing the tax office to take your tax (or repay your tax) directly from your bank account, as opposed to paying cash, you should declare by 27th June.

If you are tax resident but have the non resident tax exemption (Beckham's Law) and have been paying the flat rate 24% all year you do not have to do a tax declaration; any non Spanish income is not taxable.

You can pay in two installments to spread the tax burden - 60% at the end of June and 40% in November.

Deductions are available for rent and housing costs paid, including mortgage repayments, if income is below 24.000 level

If you have rental income it must be declared but if you are renting out a property as a dwelling ("vivienda") you can claim a deduction of up to 60%. If you are renting out a foreign property (e.g. UK) but pay the tax on it in that country you can leave it off your Spanish tax return.

If you have foreign income (i.e. non Spanish) which is not denominated in Euros it needs to be translated at the exchange rate prevailing at the point at which you earned the income. For regular receipts through the year an average rate is acceptable.